Defense & Space Tech: Shielding the Modern World

A multi-year defense rearmament cycle is broadening from weapons replenishment into industrial capacity, autonomous systems, cybersecurity, and AI-enabled defense technology.

• Global military spending reached approximately $2.9 trillion in 2025 after twelve consecutive years of growth and is projected to exceed $3.8 trillion by 2030.
• NATO allies have committed to defense and security-related spending equal to 5% of GDP by 2035, while BAE Systems, Rheinmetall, Leonardo, Thales, and Saab held backlogs equal to roughly two to five times their projected 2026 revenue as of August 2026.
• The proposed U.S. FY 2027 defense budget totals $1.5 trillion, including $344 billion for research, development, test, and evaluation and $413 billion for procurement. Global X estimates defense industrial base investment at $161 billion in 2027, roughly 15 times the FY 2026 level.
• Drone warfare is changing procurement economics because intercepting a $30,000 drone can cost defenders millions of dollars. The U.S. FY 2027 budget request includes about $54 billion for autonomous and remotely operated systems and $20.6 billion for counter-unmanned systems.
• Defense technology adoption is gaining scale, with Palantir awarded a $10 billion U.S. Army contract and Anduril a $20 billion contract. The Defense Innovation Unit's 2026 budget reached $979 million, about four times its level five years earlier.
• Cybersecurity spending could reach $464 billion globally by 2030, while the U.S. Cyber Command FY 2027 operations funding request of $2.2 billion represents a 35% year-over-year increase.

Takeaway: Defense companies that combine manufacturing scale with AI, software, autonomous systems, or cybersecurity could benefit from sustained military spending, recurring digital revenue, and stronger backlogs, although the investment case depends on governments converting budget requests into production and deployment.